UpdateChina quake to cost $20bn, dam leaks arise

15 May 2008 05:30[Source: ICIS news]

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SINGAPORE (ICIS news)--Damages from the massive earthquake in Sichuan in southwest China earlier this week was estimated at above $20bn as troops rushed to plug cracks in dams to prevent flooding in an already devastated area, media reports said on Thursday.

Using level of insurance estimates for residential, industry and construction properties in the disaster zone, consulting firm AIR Worldwide said the cost of damages is likely to exceed $20bn.

The total value of property in ?xml:namespace>Chengdu, the capital district of Sichuan, is estimated to be over CNY800bn ($114bn), of which only a small portion is covered by insurance, the firm added.

That estimate may rise as troops rushed on Wednesday to plug cracks in hundreds of dams around the quake’s epicentre, reports said.

Citing the National Development Reform Commission, China's top economic planning body, the reports said quake had damaged 391 dams of which two were large ones, 28 were medium-sized and the rest were small.

Around 2,000 troops were sent to work on the Zipingpu dam, close to badly damaged city of Dujiangyan, Xinhua reported.

Substantial property damages aside, almost 15,000 people have been killed southwestern China with another 25,788 still buried and a further 14,051 missing, reports said.

The death toll from the 7.9-magnitude quake which struck on Monday now stood at 14,866, said the official Xinhua news agency.

Damaged land transport links were hampering relief efforts in the region and restoring them have become priority, industry officials said.

The Shanghai Composite Index fell 1.8% to close at 3,560.24 on Wednesday as the quake raised fears of price hikes due to supply disruptions. The exchange has also lifted the suspension in share trading of 32 of 45 companies affected by the earthquake.

While damaged land transport links were overused by relief efforts, the ChengduShuangliuInternationalAirport, which was earlier closed, has resumed operating at full capacity after repairs, the Civil Aviation Administration of China (CAAC) said.

Chinese Premier Wen Jiabao has ordered the armed forces and civil aviation department to deploy 90 more helicopters for rescue missions in the quake-stricken Sichuan province, state media said.

These helicopters will join the 20 that has already been dispatched to the quake-hit areas for reconnaissance, food and water airdropping, transporting injured people and delivering rescuers.

The government has dispatched nearly 100,000 relief workers and more than 900 soldiers to Wenchuan county in the north of Sichuan – the quake’s epicentre.

The province's chemicals industry has been hit hard by the disaster, which has led to major production and logistics problems.

Railways and roads linking Sichuan to northwest provinces such as Shaanxi, Gansu, Ningxia and Xinjiang, and southwest like Yunnan and Guizhou have collapsed, causing major transport problems, a local logistics company official said.

Rail transportation from Shanghai to Sichuan province had also been affected as the rail link passes through Xian in neigbouring Shaanxi province, he said, adding that telecommunication links with the affected areas were still down.

Most plastics processors in Sichuan were located in Mianyang and Deyang county, where buildings and roads were also damaged by the quake, although to a less extent than Wenchuan and Dujiangyan county, also north of the provincial capital Chengdu, a Chongqing-based trader said.

However, Migao said its potassium nitrate facility in Sichuan province escaped serious damage.

PetroChina's operations in the area, including its chemical production plants, have all been disrupted, a company spokesman said.

Titanium dioxide (TiO2) producer Sichuan Lomon has shut down its 80,000 tonne/year TiO2 plant in Mianzhu as a precautionary measure, while more than 3,000 aftershocks have forced crude benzene producers to cut production over safety concerns.